Chapter 6

Contracts

Ah contracts. You can't sell your site without a contract.

When I sold my first site, the contract was over 20 pages long. That didn't include NDA's and Non-Compete Agreements.

You do NOT want to be responsible for the contract. It costs insanely high prices to hire an attorney to draft a contract for you.

We're talking thousands of dollars. Tell the company that wants to buy the site that they can draft the contract and you will sign it.

Many companies have lawyers working for them in house. They're paying their salaries anyway, and they get paid to do just this kind of thing.

So it's often no skin of their noses to draft the contract. Plus it allows them to wiggle things into it easier!

Now this is important.

CONTRACTS ARE NEGOTIABLE!

I can't even remember how many drafts we went through. I didn't like a lot of the wording. It gave away more than I was offering. So we negotiated back and forth.

I would ask them to take something out, they would agree but then add something else and it went back and forth like this until we were both satisfied.

We Fedex'd the final copy to each other for signing, but the drafts were all faxed back and forth.

Buy a fax machine if you don't have one. You can get them for under a hundred bucks and will come to depend heavily on them.

Now I want to talk about one certain provision that everyone I have ever dealt with has tried to slide into the contract. It's the employment agreement.

These guys know they're buying a web site, but they ALWAYS try to get more. And by more I mean you.

They'll slide an employment agreement in that says you agree to work for them for so long. It may be to help transition, it may be for longer. But they'll always try to get it for free.

If you want to work for them, that's great and fine.

If you just want to stay around to help the transition (I would do that) that's fine too. But for goodness sakes, try to make them pay you for your time! How much would it cost them to hire a person to do what they want you to do?

Employment agreements are ok, but if you want to work for them (even just to transition) get them to tack on a few thousand bucks (or whatever you think the work is worth) per month.

If they won't then try to get them to up the price that they are offering for the site based on this clause.

Next I want to talk about Non-Compete agreements. I hate these.

I understand why the company that is buying your site would want you to sign this. They want to make sure you won't sell them the site then turn around and start a similar site and compete with them.

If they are specific like that, then you might agree.

But I once signed one where the company was a larger corporation, just about anything I ever did could be construed as competing with them if they wanted to get totally technical about it.

And that was bad for me!

If you have to sign a non compete (and sometimes they will insist) try to get the best terms you can. And try to get them to offer some sort of compensation for it.

Also, be sure to make certain that the agreement states exactly what will happen to you if you break the agreement.

I once had to sign one that was insured by like 2 thousands dollars. Well if I needed to compete with them I would go right ahead and pay the 2 grand. Many times these things are just formalities but try to be careful.

Trust me, this will always come back and bite you.

Let's get back to the basic contract. What needs to be in them?

Really there are no answers to this question. For the most part the contract is going to say what the company that's buying your site wants it to say.

My favorite contracts are the one pagers that say "We agree to buy this site from you. We agree to pay you X amount on X date at which time you will hand over the site".

Of course, I rarely get this contract. That's REALLY all that needs to be said. But of course, each company has their own contracts that they are comfortable with.

They have to be sure that they are protected in case something goes wrong.

And of course, you'll want to make sure that you're protected too.


<< Back | Table Of Contents | Next >>